S-REITs Weekly - UOB Kay Hian 2020-07-14: US REITs Troubled By 2nd Wave COVID-19; OCBC Trimmed Lendlease REIT Holdings

S-REITs Weekly - UOB Kay Hian | SGinvestors.io FRASERS CENTREPOINT TRUST (SGX:J69U) LENDLEASE GLOBAL COMMERCIAL REIT (SGX:JYEU) ARA LOGOS LOGISTICS TRUST (SGX:K2LU)

S-REITs Weekly - US REITs Troubled By 2nd Wave COVID-19; OCBC Trimmed Lendlease REIT Holdings




WHAT HAPPENED LAST WEEK


UOBKH S-REIT Index retraced marginally by 0.6% wow to 252.1 last week.

  • Hotels will soon be able to usher in Singaporeans on staycations. Hoteliers can apply to Singapore Tourism Board (STB) to resume providing accommodation for purposes of leisure and opening recreational areas for children. Guests have to wear masks within the hotel, except when they are in their own rooms or eating. Only five individuals from different households are allowed to gather at any guest room. Hotel staff will screen guests for symptoms, including fever and running nose. Safety ambassadors are deployed to remind guests against clustering or loitering at common areas.
  • See

Top outperformers.


Top underperformers.



SPOTLIGHT – Frasers Centrepoint Trust (BUY/ Target: S$2.85)


Acquisition is mildly DPU accretive.

  • Assuming the acquisition had been effected at the beginning of FY19, pro forma FY19 DPU would have increased 0.13% to 11.987 S cents, while NAV per unit would have stayed unchanged at S$2.21.
  • Pro-forma gearing of Frasers Centrepoint Trust post acquisition was 36.2% as at 30 Sep 19 (previously 32.9%). The acquisition is fully funded by debt.

Enlarged scale in suburban retail malls.

  • ARF owns five suburban retail malls, namely Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1, totalling 1.0m sf of NLA. These suburban retail malls share similar profile and characteristics to Frasers Centrepoint Trust’s malls, which focus on essential spending and F&B. They are located in populous residential areas and close proximity to transportation nodes. These characteristics ensure suburban retail malls are more resilient despite the COVID-19 pandemic.

Centred on essential necessity spending.

  • Frasers Centrepoint Trust is a pure play on suburban retail malls in Singapore. Its portfolio comprises seven suburban retail properties in Singapore, totalling 1.4m sf of NLA. Basic necessities, such as F&B, supermarket & hypermarket and education accounted for 37.7%, 5.1% and 1.9% of gross rental income (GRI) respectively.
  • Discretionary spending on fashion, leisure & entertainment and jewellery & watches accounted for only 13.5%, 3% and 2.5% of GRI respectively. Frasers Centrepoint Trust benefits from resiliency of suburban retail malls.

Maintain BUY.






Jonathan Koh CFA UOB Kay Hian Research | Loke Peihao UOB Kay Hian | https://research.uobkayhian.com/ 2020-07-14
SGX Stock Analyst Report BUY MAINTAIN BUY 2.850 SAME 2.850
NOT RATED MAINTAIN NOT RATED 99998.000 SAME 99998.000
NOT RATED MAINTAIN NOT RATED 99998.000 SAME 99998.000



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